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Rishi says plan to slow down time off and get money back is now working
Official figures released last night confirmed companies were returning unused cash aid intended to keep workers on the payroll.
Around £ 300million distributed under the Coronavirus Job Retention Scheme has been returned in the past three months.
Celebrating the news, Sunak said, “We stepped in to help businesses when they needed it most.
“As the economy rebounds, £ 1.3bn in cash on leave has been returned by UK businesses.
“When businesses no longer need the cash, it’s great to see them return it as they recoup their profits, and I’m proud to see more and more businesses crossing over. this step.
“The leave program has protected nearly 12 million jobs, protecting communities across the UK from unemployment.
“But now the UK economy is roaring again.
“Unemployment is going down and job vacancies are going up, we can get going.
“Our £ 400 billion jobs plan is working – it protects livelihoods, it now creates jobs, giving people the skills and opportunities they need to be successful.”
The companies have reimbursed HMRC £ 1.3 billion since July 2020 through claims adjustments and the voluntary disclosure service, according to the figures.
The Job Retention Scheme has supported over 1.3 million businesses in total.
About 1.6 million workers are currently on leave, the lowest figure since the peak of the pandemic in 2020, and about 340,000 people left the scheme – which is due to end on September 30 – in July.
The Chancellor added: “This government has stepped in to help people when people need it most, supporting nearly 12 million jobs.
“It worked, as almost two million fewer people are now expected to be out of work in the UK than feared.”
HMRC’s Taxpayer Protection Task Force, made up of 1,250 people, has also launched a crackdown on companies that have fraudulently claimed money on leave.
Treasury officials insist the program was the “right thing” to do at the height of the pandemic, when lockdown restrictions were in place.
With the economy reopening, they are now ending the program as employees return to their workplaces.
Support is shifted to focus on helping workers learn the skills that will best serve them in a post-Covid economy.
Despite positive news on refunds, the total cost of the leave has reached around £ 68.5bn – and Nigel Morris, director of employment tax at the accounting firm MHA, expects the total reach £ 70 billion by October.
He said the program was “an astounding amount of money and for the most part good value for money,” but warned that companies making incorrect claims could run into problems.
He told them to pay off HMRC as soon as possible, explaining, “This should help avoid interest and penalties.
The HMRC and the National Audit Office estimate that between five and 10 percent of the total amount of leave requested could represent excessive demands. “
Meanwhile, the Office for National Statistics (ONS) predicted yesterday that around £ 20.9 billion in government guaranteed loans made during the pandemic will never be repaid.
He revealed that government borrowing fell in August as the economy rebounded and tax revenues increased.
The ONS said borrowing stood at £ 20.5bn in August, up from £ 26bn a year earlier – but added last month’s figure was the second borrowing in August on highest since records began in 1993.
Data shows borrowing so far this fiscal year has reached £ 93.8 billion since the end of March, down £ 88.9 billion from the same period a year ago. As a result of this low revenue and high expenditure, the public sector borrowed £ 325.1 billion between the end of March and August.
This equates to 15.5% of gross domestic product (GDP), the highest ratio since the end of World War II.
Unemployment is falling and job vacancies are increasing
Public debt stood at £ 2.2 trillion at the end of August, or about 97.6% of GDP, the highest ratio since March 1963.
However, figures show spending is starting to drop from £ 1bn in August 2020 to £ 79.6bn.
It was higher than the amount the government received in taxes, which stood at £ 61.2bn – £ 5.3bn more than in August of last year – although payments from taxes were £ 9.5 billion more than in July 2020, as the economy started to fully reopen last month.
Debt levels have swelled amid the pandemic after the government launched costly support measures to help households and businesses.
ONS officials have pointed out that recent high inflation figures are pushing up interest payments on Britain’s debt.
In August, interest payments stood at £ 6.3bn, £ 2.9bn more than 12 months earlier.
The ONS said: “Recent high levels of interest payments on debt are largely the result of movements in the retail price index to which indexed gilts (government bonds) are pegged.”
Isabel Stockton, research economist at the Institute for Fiscal Studies, said: “The ONS estimates that default will total £ 21bn, which would amount to just over a quarter of the £ 80bn loaned.
“This is a big figure, but not as big as the Office for Budget Responsibility feared, whose estimate in 2021 was that £ 27 billion would not be clawed back.
“The precise size of last year’s historic peak in borrowing is not that important.
“What matters most is the strength of the eventual recovery, if the current strength in tax revenues persists in the years to come and if the increases in income, corporate and national insurance taxes announced since March are implemented as planned. “
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